People of Blockchain Pt. 3 with Pavel Matveev from Wirex
Pavel Matveev — about reinventing banking for people and businesses
150 years ago, people wanted faster horses, but Karl Benz invented the car. Today, people want better banking, not realizing that it’s an old and broken model, so Wirex does what Karl did with cars and is reinventing how people and businesses store and spend their finances.
Wirex Limited is a borderless payment platform and it offers consumers and businesses crypto and traditional fiat currency accounts for domestic and international payments. Wirex launched the world’s first Visa card that allows users to convert and spend cryptocurrencies wherever Visa is accepted, and the company now supports 9 cryptocurrencies and 10 traditional currencies, boasts over 2 million users and has processed more than US$ 2bn of transactions.
In our latest press release from Wirex, plans of launching 26 fiat-backed stablecoins using Stellar technology have been revealed. You can read all about the news here, but for now, let’s dive in.
So, Pavel, I’m really curious about what leads a man to create what you have created — a product that is loved by 2.000.000+, and supporting 300 employees in their own journeys.
What was your background before Wirex?
It’s 2M+ customers in 130+ countries, actually!
I started my career in 2002, 12 years later, I worked in top-tier investment banks in London: Morgan Stanley, Barclays Capital, Credit Suisse, etc. Primarily, I helped banks build trading platform and algo-trading strategies. I have always dreamed of building a tech company.
What led you to start Wirex? Did you experience a ‘Eureka!’ moment like I did personally when I sent a $300 express transfer via my local bank and paid $60 in fees? What’s the story?
I’ve read about Bitcoin on the internet, I think it was on Reddit, being quite technical it was very easy for me to see the potential of blockchain technology. At that time, the price of bitcoin $200. Bitcoin is used in trading as a currency or commodity, so my trading background was quite handy.
The main reason why I was interested in bitcoin was the fact that I love the technology and I was looking for the next challenge in my career. The thing I liked the most was that in 2014 Bitcoin was only for tech people, you had to install tons of different wallets, download blockchain, check if it works or not — it was a great time, and I knew it was something I wanted to explore further.
Thanks, Pavel. Now, let’s talk about Wirex. On Altcoin Magazine we’ve previously covered your product via a review, but much has happened since then, including a rebrand. For those who might not know Wirex, can you tell us what you are?
Wirex was founded in 2014, back in the days when Bitcoin was purely for geeks. It was not a user-friendly system at all, so on one of our main goals was to make using it simple, easy, and accessible to everyone.
The second goal was to use it in payments for transferring value. We launched our first product — a Bitcoin-supported debit card — in 2015, way before other companies started looking into this space (note: Wirex was the first company in the world to launch crypto debit card).
In short, the ultimate goal was to make crypto an easy and convenient payment instrument.
Wirex is a London-based Fintech company. We currently have a team of 300+ people located in London, Tokyo, Singapore, Toronto, Atlanta, and Kiev. We are not an ICO company but instead are backed by SBI Group/Softbank.
Our main mission is to provide a genuine alternative to conventional financial institutions, by connecting traditional and new digital ecosystems on one borderless payment platform.
Awesome! In a call prior to the inverview, you mentioned that Wirex is not an ICO, but you mentioned to me that this was actually an option you had thought of.
Why did you decide to stick to the old-fashion business plan, and why do you think you managed to succeed to this expend without the need of an ICO? How would things have looked if you did do the ICO?
When ICO hype kicked off, there were a lot of scammers and people who were looking to make quick money rather than doing business. It was tempting to raise money via an initial coin offering, but we decided that we DON’T want to be associated with this part of the crypto industry. Instead, we decided to focus on building the platform, growing our team and obtaining licenses. In retrospect, it was the right decision, being backed up helped us get our bin sponsor and be one of the crypto-supported debit cards to re-launch after WaveCrest operations were shut down by Visa. It really helped to demonstrate our credibility to the Financial Conduct Authority.
You call Wirex a payment provider, but you also supply banking solutions for businesses, and I think this is where it gets really interesting!
On the call we had the other day, you mentioned that most “disruptive” banks nowadays are still just old banks with a new paint job, but right from the beginning, you wanted to reinvent the bank by introducing, and giving the people and businesses the opportunity to utilize both fiat and cryptocurrencies as they wish. Am I right?
We have always positioned Wirex as a payment company and we’ve always focused on the huge potential of digital assets being used in payments. Put simply, payments is our focus — not trading or investment. While I am certain that digital/crypto payments are the future, the industry is still in its infancy and currently suffers from poor adoption and a lack of integration with existing financial infrastructure.
That’s why we believe the first step toward mass adoption is bridging the gap between digital and conventional payments. Our Wirex Visa cards allow you to spend digital currencies in 40M+ merchants around the world and our platform lets you use Wirex like your normal bank.
People often ask me how Wirex is different from other challenger banks. I usually use the apocryphal Henry Ford quote to explain the difference:
“If I had asked people what they wanted, they would have said faster horses (better banking).”
Existing challenger banks are trying to create a better banking experience by streamlining and improving conventional finance rails. I believe this is a dead-end — you can’t create better banking by using legacy infrastructure, you can’t make banks open on the weekend and you can’t make SWIFT faster and cheaper. Going back to Ford’s quote, all these challenger banks are doing is making a faster horse.
Wirex, on the other hand, has created a payment platform for a token economy from scratch. We believe that all payments will be digital very soon and are building the eco-system to accommodate this. We are building the car, NOT a faster horse.
I love that, and I agree. There are way too many “disruptive banks” that is just an old bank with a new paint job. Surely, to make banking better, it needs to be reinvented.
Wirex came about in 2014, a couple of years prior to the 2017 bull market, so to say. Being a completely new type of business in an industry that is not even certain to become widely adopted, what struggles did you go through, and then when the bull market arrived, how did that affect Wirex?
The bull market of 2017 is not the first bull market we’ve seen; we don’t think it’s the last either. One of the struggles we faced last year was the overwhelming noise from ICO companies who valued aggressive PR and marketing over a working product. Companies promised customers the world without being able to deliver — even as a reputable firm with a revolutionary product, it was difficult to be heard through the din. Now the hype is over. ICO companies are dead or dying and we are one of a few players on the market getting ready for the next bull run.
We’ve been in the so-called crypto winter for about a year and a quarter if you ask me. What’s your take on the downtrend, and why might it even be an important cycle to go through?
The crypto-winter is healthy for the industry. It has cleared the market of dead wood and allowed space for innovative companies to thrive.
Totally agree, and I also think this is what makes Wirex stand out — you know, one of Wirex’s core values is to use crypto beyond trading and speculation, and that leads me to wanting to ask;
Do you think most projects are handling crypto the wrong way, and what should be their focus, in order to achieve adoption rather than being a speculative asset?
Well, 99% of companies focus on trading and speculation because it’s much easier. In order to achieve mass-adoption, companies must concentrate on solving real-life problems — not crypto-gambling.
Indeed. Crypto is just small fish in the big world economy and I too believe that crypto shouldn’t be developed to solve crypto related problems, but if projects and companies solve real world problems with the use of crypto or blockchain, then that will be the driving factor for success.
Now, can you expand a little on the business-banking side of Wirex? Why do businesses like us need it? Oh, and FYI, people, Altcoin Hub, Inc. is on the waiting list for their business solution.
Getting access to a bank account is a challenge for all crypto/blockchain companies. Traditional banks have turned their backs on it and frequently refuse access to these type of companies. Individuals have even had their accounts frozen on suspicion of being involved in the crypto-related activity. However, businesses still need some sort of bank account to be able to conduct daily business transactions.
We already provided an alternative to traditional banking with our personal accounts. We quickly realised that some customers were using their accounts for business purposes. Our goal is to provide choice and flexibility in payments to our customers, individual or businesses. So we launched our business account. With Wirex business companies can have FIAT and Crypto accounts in one place + OTC exchange rates for any currency pair.
Now, knowing some of your favorite topics, I figured we’d dive into them as well. When it comes to payments, crypto is a phenomenal solution due to its peer to peer nature, low costs, and short transaction times, but not many have managed to allow crypto payments to be a natural part of life. What’s your take on this?
Digital peer-to-peer (P2P) payments are the future, but adoption takes time. As more and more companies focus on real-life use cases (not trading), we will see increasing numbers of people using it for payments. Once we reach a critical mass, P2P payments will be everywhere. Imagine PayPal payments on a global scale and now fees…
What’s your take on stablecoins? Personally, I see them as a great steppingstone to broader adoption of crypto, but the current solutions have their problems and limitations. Where do you see stablecoins being used in the near future, and how exactly will it play out for them?
Personally, I believe stablecoins will change the payment landscape very soon. They are not volatile, they fall under existing e-money regulation and don’t require local liquidity providers to convert them back into fiat currency. I believe that stablecoins will be used as payment rails for cross-border payments and Machine-to-Machine (M2M) transactions.
Oh, and in a recent press release from you guys that we published in our magazine, we revealed your plans of adding 26 Stellar-based stablecoins to Wirex. Can you expand on this? Why is this critical and beneficial for users and businesses?
Stablecoins have the potential to transform international remittance. For a start, they combine the speed and cost of cryptocurrency transfers with the market stability of fiat currency. Traditional banking remittance can be expensive and time-consuming and does not reflect the 24/7, 365 days-per-year live economy that consumers have come to expect. Fiat-backed stable coins also fall under existing e-money regulation — e.g. in Japan, where cryptocurrencies are regulated, there is no need to obtain a Virtual Currency License if your company only deals with fiat-backed tethers.
Wirex stablecoins will be available to every one of our 2M+ retail and 5K corporate customers across more than 130 countries worldwide.
So who stands to benefit, you may ask?
1) Retail customers — Stablecoins are a cost-effective and efficient way to move funds across the globe and we expect a large volume of retail customers to use stablecoins for sending money to their friends and families around the world. These stablecoins can then be spent using Wirex Visa card, redeemed into bank accounts or spent directly with merchants who accept fiat-backed tethers.
2) SMEs — Businesses will use Wirex stablecoins to pay international suppliers, manage FX exposure and pay salaries — particularly if a company’s employee base is distributed across several countries or regions.
3) Merchants — Every merchant that accepts Wirex stablecoins will benefit from zero fees (a 3–5% saving on existing Visa/Mastercard charges) and instant settlements. Wirex stablecoin tokens are available immediately, whereas Visa and Mastercard can lock funds for 2–4 weeks — a nightmare for small and medium companies.
Awesome, Pavel. I’ll make sure our employees are paid via your platform, it sure does seem like the most optimal solution — especially since we’ve got employees wanting payment in anything from ETH to USD to BTC.
So when it comes to market trends, a lot of things are currently going on. On one corner, we got STOs allowing regulated tokenization of everything, and in the other corner, we have the Lightning Network allowing for lightning fast payments with close to zero fees. What’re your thoughts on the two, and what other market trends come to mind that we haven’t talked about yet?
I would probably say that there are two main trends developing right now:
1) Market consolidation. As the crypto winter continues, many companies struggle to generate revenue or gain initial traction, so other bigger companies (mainly exchanges), buy them. You’ve probably read about Coinbase and other exchanges investing in or buying-out smaller tech startups.
2) Stablecoins. There are around 50 different stablecoins available right now, but we will see another 50–100 this year.
Another emerging trend is those big players like Facebook, JP Morgan, etc. are moving to this space, so I am sure that we will see more non-trading use cases very soon.
I think STO is an excellent example of tokenisation trend, it is easier to raise funds and attract investors for companies issuing STO. One of the challenges is that there is not that many regulated platforms trading STO, but I expect this number will be growing with the time and STO will be more popular in the future.
Lighting network is an excellent tool to improve speed and scalability of Bitcoin protocol, as the number for lighting nodes grow, we will see more companies accepting Bitcoin as payment/settlement instrument.
Thanks, Pavel. I love your inseight in the topics above.
So I’d like to finish off with some pieces of advice from you, who has proven to make it in this industry. What’s your definition of success, especially within crypto and blockchain?
It depends. Success means different things for different people. It could be revenue, the number of customers, or the amount of raised funds. For Wirex, it‘s all about the number of happy customers. As this number keeps growing, I am more and more confident that we are doing the right thing. Success is also for me building an environment where Wirex’s employees can innovate, share ideas and build a product together.
Thank you. Can you give three pieces of advice to anyone reading this, who might be starting their own business in this industry?
a) Building and running a company is not for everyone — it requires a lot of effort and will be extremely challenging, so dedication and hard work are key!
b) Choose the right partners. Remember that senior management must complement each other skill-wise and in terms of personality.
c) Build your company culture from day one. Culture is often overlooked, but it’s extremely important. A team with the right attitude and culture can achieve the impossible.
Lastly, what are you most grateful for lately?
I am grateful to work with such amazing people in the Wirex team.
Thank you, Pavel. I think that was all for now. It’s been an absolute pleasure to catching up with you again, and I think this just might have been one of the most valuable interviews we’ve conducted.
So where can we follow Wirex online, sign up for the personal or business account, or in other ways help Wirex?
Thanks, you can do so online at wirexapp.com!